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    EID Parry

    EIDPARRYNeutral
    Fast Moving Consumer Goods·7 Aug 2025
    Management Summary

    EID Parry delivered a mixed Q1 FY26, managing a turnaround to profitability at the PBT level despite regulatory headwinds in the sugar and CPG segments. While government-mandated release quotas restricted sugar sales volumes, the company benefited from higher realizations and a growing distillery business. Management is now focused on consolidating recent ethanol capex and expanding the CPG footprint into value-added 'brown' sweeteners.

    Highlights

    8

    • Turned profitable at PBT level with ₹67 lakhs profit compared to a loss of ₹6.79 crores in the previous year.

    • Sugar segment revenue declined 14% YoY to ₹347 crores, primarily due to lower release quotas from the government.

    • Distillery segment revenue grew to ₹296 crores from ₹263 crores YoY, with sales volumes reaching 413 lakh litres.

    • Average sugar selling price increased to ₹41.99 per kg, up from ₹38.60 per kg in the corresponding quarter last year.

    • Cane costs rose significantly to ₹3,844 per metric ton from ₹3,491 per metric ton due to FRP hikes.

    • Consumer Product Group (CPG) turnover stood at ₹192 crores, a decline of 11% YoY due to sweetener category quota restrictions.

    • Short-term debt increased to ₹461 crores from ₹220 crores YoY, driven by molasses sourcing and working capital needs.

    • Refinery operations in Kakinada produced 2.25 LMT of sugar, showing improved operational performance.

    Concerns

    2

    • Government Release Quotas

    • Rising Input Costs (FRP)

    Key financials

    Single quarter

    05 metrics
    1. 01Sugar Revenue₹347 Cr-14.0%YoY
    2. 02Distillery Revenue₹296 Cr+12.5%YoY
    3. 03PBT₹0.67 Cr
    4. 04Sugar Selling Price₹41.99+8.8%YoY
    5. 05Cane Cost₹3,844+10.1%YoY

    Segment breakdown

    Sugar
    ₹347 Cr Revenue84,000 MT Sales Volume
    Consumer Product Group
    ₹192 Cr Turnover33% Staples Growth
    Distillery
    ₹296 Cr Revenue413 lakh litres Sales Volume67.59 Rs/litre Realization
    Refinery Operations
    ₹908 Cr Operational Revenue2.25 LMT Sugar Production
    List

    Guidance & targets

    4
    CategoryTargetPriority
    Capacity
    Distillery Capacity
    18 crore litres
    		High
    Other
    Distillery Capacity Utilization
    90% to 95%
    		Medium
    Debt
    Short-term Debt
    ₹1,100 crores
    		Medium
    Capex
    Expansion Plans
    No expansion
    		High

    Risks & concerns

    6
    RiskSeverity

    Government Release Quotas

    Lower release order quotas from the Department of Food and Public Distribution significantly reduced sugar sales volumes. — Management acknowledged

    high

    Rising Input Costs (FRP)

    Cane costs increased from ₹3,491 to ₹3,844 per MT due to central government FRP hikes. — Management acknowledged

    high

    Stagnant Ethanol Pricing

    No price increase for ethanol in the last 3 years despite rising feedstock costs. — Both acknowledged

    medium

    Short-term Debt Spike

    Short-term debt more than doubled YoY to ₹461 crores due to molasses procurement and CPG working capital. — Analyst acknowledged

    medium

    Areas of Evasion(2)

    • Specific margins between maize and molasses feedstocks.
    • Potential stake sale in Coromandel International to reduce debt.

    Q&A highlights

    3

    “The quota is going to be a limiting factor on the sweetener sales, but we have our ways and means of moving around on this. One is by focusing on the browns category, which is not driven by the quotas so much.”

    Reveals how the company plans to bypass government-mandated sugar quotas by shifting to value-added categories.

    asked by Rajesh Majumdar, B&K Securities

    2 min read5 chapters

    Detailed Narrative

    01

    Sugar Segment Faces Quota Headwinds

    The sugar segment's revenue fell 14% to ₹347 crores as sales volumes dropped to 84,000 metric tons from 1.05 LMT YoY. This decline was primarily attributed to lower release order quotas from the Department of Food and Public Distribution. Despite the volume drop, average selling prices improved to ₹41.99 per kg, providing some cushion against the 10% rise in cane costs (FRP) which reached ₹3,844 per metric ton.

    02

    Distillery and Bio-fuel as Growth Drivers

    Distillery revenues rose to ₹296 crores, supported by sales of 413 lakh litres compared to 390 lakh litres in the previous year. Realizations also improved to ₹67.59 per litre. Management highlighted that the ethanol capex cycle is now complete, and the focus has shifted to maximizing utilization (targeted at 90-95%) and managing the revenue mix between ENA and ethanol based on market margins.

    03

    Consumer Product Group Strategic Pivot

    The CPG business saw an 11% decline in turnover to ₹192 crores, largely due to sweetener category quotas. However, the staples segment showed robust growth of 33%. To counter quota limitations, the company is focusing on the 'browns' category (value-added sugars) and expanding its numerical distribution, which currently stands at approximately 2 lakh outlets.

    04

    Refinery Operations and Debt Management

    Refinery operations in Kakinada reported a positive PBT of ₹67 lakhs, a significant improvement from the ₹6.79 crore loss in the prior year. Operational revenue stood at ₹908 crores. Management clarified that recent capital infusions were directed toward debt reduction in the refinery segment. Short-term debt for the company rose to ₹461 crores, driven by forward contracts for molasses and increased CPG receivables, but is expected to stabilize around ₹1,100 crores by year-end.

    05

    Global and Domestic Market Outlook

    The global sugar market is expected to remain in a mild surplus through 2025-26, with raw sugar prices currently around $0.16 per pound. Domestically, India's production reached 25.7 MMT by mid-July, with closing stocks estimated at 5.5 MMT. Management remains optimistic about the upcoming season due to favorable monsoon spells, which have positively impacted cane growing states like Maharashtra and Karnataka.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.